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EBRD lends to independent Russian oil producer Geoilbent
$50 million loan extension will help clean environment at new oil field
The EBRD is providing Geoilbent LLC a $50 million loan extension for the development of a recently discovered oil field in the Yamalo-Nenetsk autonomous region in Russia. Geoilbent, a Russian-US joint venture based in Yamalo-Nenetsk, is an independent producer that puts a high priority on sound environmental management and cooperation with the local indigenous population.
The extended loan builds on a $65 million loan signed in 1996 to develop other oil fields in the same region. The new funding will help Geoilbent develop the new South Tarassovskoye oil field in accordance with best industry practices and World Bank environmental, health and safety standards.
Among various measures agreed with the EBRD, Geoilbent has committed to cut pollution by re-using the associated gas produced by the field. Other measures include approval of a contingency plan on how to deal with oil spills; a comprehensive environmental programme to monitor local flora and fauna; the removal of solid waste from the field; and the mechanical and biological recultivation of land in the drilling area.
Geoilbent has set new standards in the region with regard to cooperation with indigenous people. Since starting operations in the area in 1996, the company has created business ventures with local Nenets groups, purchasing fish, meat and berries from them, and in return providing spare parts for boat engines, diesel fuel and other goods that are difficult to find in the area.
Moreover, Geoilbent finances a programme under which local people receive medical examination and treatment. The programme also makes educational grants, sponsors publications in the Nenets language, helps renew local schools, and buys medical equipment for local villages.
Kevin Bortz, EBRD Director for Natural Resources, said the follow-up loan bears witness to the Bank's con-tinued support for the development of an independent oil sector in Russia, as well as increased competition in the industry. It also confirms the long-term partnership between EBRD and Geoilbent.
"This project is testimony to the long-standing cooperation between foreign investors, Russian oil companies and the EBRD," said Leonid Mikhelson, General Manager of Minley OJSC. "The Geoilbent project confirms the EBRD's commitment to supporting the development of a strong independent oil and gas industry in the FSU," added Dr Peter Hill, President and Chief Executive Office of Harvest Natural Resources, Inc.
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